Code section · 1993
IRC §469(c)(7)
26 U.S.C. §469(c)(7)
Internal Revenue Code
What it holds
A real estate professional's rental activities are not automatically passive: more than half of their personal services must be in real property trades or businesses in which they materially participate, and those services must total more than 750 hours in the year.
Why it matters for your study: Lets a qualifying real estate professional treat rental losses, including a study's accelerated depreciation, as nonpassive, so they can offset other income. It is why the hours an owner works in real estate matter to the value of a study.
- Category
- Passive loss & participation
- Applies to
- All property types
- Status
- Vetted
This page explains a tax authority in plain words. It is not tax advice for your situation. Joel Salas, our Director of Tax, signs every study. Citation is provided so you or your advisor can read the primary source.